Oil Prices Fall, Gains Reverse As Saudi TV Reports Imminent Production Increase

Crude oil storage tanks are seen from above at the Cushing Oil Hub in Cushing, Oklahoma on March 24, 2016. REUTERS / Nick Oxford

  • OPEC + is sticking to plans to gradually increase production – sources
  • Saudi oil production to exceed 10 million barrels per day in December, says Al Arabiya
  • Iran nuclear talks to resume on November 29

NEW YORK, Nov. 4 (Reuters) – Oil prices fell on Thursday, reversing earlier gains in a volatile session after a report that Saudi Arabia’s oil production will soon exceed 10 million barrels per day for the first time since the start of the coronavirus pandemic.

The report, from Saudi broadcaster Al Arabiya TV, came after the nation, along with other oil-exporting countries and its allies, agreed to stick to previously agreed production increases.

Brent crude fell 29 cents to $ 81.70 a barrel at 11:29 a.m. EDT (3:29 p.m. GMT). Earlier, Brent rose to $ 84.49 per barrel. U.S. West Texas Intermediate crude fell 77 cents to $ 80.09 a barrel, well below the session high of $ 83.42.

The Organization of the Petroleum Exporting Countries and its allies, known collectively as OPEC +, have agreed to stick to plans to increase oil production by 400,000 barrels per day (bpd) on a monthly basis. , sources said, despite calls from the United States for additional supplies to cool the rising prices. Read more

Saudi Arabia has already rejected calls for a faster increase in OPEC + oil supply. But the Al Arabiya TV report says the Saudis will hit 10 million bpd in December.

“Saudi Arabia is trying to get the message out to cool any backlash,” said Phil Flynn, analyst at Price Futures Group in Chicago. “Oil prices have risen in anticipation of OPEC meeting their commitment and now they are pulling out. You see some nervous trading.”

Major producers Saudi Arabia and Russia are confident that rising oil prices will not lead to a swift response from the U.S. shale industry, OPEC + sources said. US companies are committed to preserving their capital and prioritizing investor returns. Read more

Yet several major oil companies are planning to increase their production or spending on shale next year. Read more

Iran and six world powers agreed to resume talks on November 29 to revive the 2015 deal on Iran’s nuclear program. Iran has asked Washington to drop sanctions that have limited its exports. Read more

On Wednesday, both benchmarks posted their biggest daily percentage declines since early August, after weekly U.S. inventory data showed a larger-than-expected increase in crude inventories last week.

Reporting by Stephanie Kelly in New York; report by Bozorgmehr Sharafedin in London and Florence Tan in Singapore Editing by David Goodman and David Gregorio

Our standards: Thomson Reuters Trust Principles.

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Felix J. Dixon

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